IEA Raises Its Projection For Oil Demand In 2023

Demand For Oil Across The World Expected To Hit Major Lows By 2028

In a new report by IEA, in the medium term, the demand for oil is expected to lower by 2026. However, the current total demand will likely rise on the back of robust demand for petrochemicals.

The main factors that will lead to the demand slowdown include elevated prices and worries over supply security, which is propelled by the growing concern over the global energy crisis and the global transition to clean fuel technology.

Request Access For the Latest Price Trends of Fuel Oil

As per the forecasts, the oil demand in 2023 with regard to present-day government policies and market sentiment will increase between 2022 and 2028 by 6% and hit 105.7 million barrels per day (mb/d). The demand will be propelled by strong demand from the petrochemical and aviation industries.

However, after 2026 the oil demand for use in transport will dip as a result of the development of the EV (electric vehicles) industry along with the shift to biofuels and the improvements in fuel economy.

Currently, the oil markets worldwide are still managing to recover from the rough three years of Covid and, consequently, Russia's invasion of Ukraine. The energy crisis was started by the attack on Ukraine by Russia, which caused havoc in trade flows worldwide.

Read More About Fuel Oil Production Cost Reports - Get Free Sample Copy in PDF

According to the article by Procurement Resource, the new forecast for oil demand revealed by the IEA hints at a global decline in oil demand after 2026. The reason for the decline will be high costs paired with concerns over supply safety and energy transition, which focuses on cleaner fuel technology.

Presently the demand is expected to rise and stay strong, mainly in the petrochemical and aviation industries. However, this will change after 2026 with rapid advancements in the EV sector, the rise of biofuels, and improvements in fuel economy.